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Ireland cuts growth forecasts, citing slowdown in key export markets

Edmund Heaphy
Finance and news reporter
Irish finance minister Paschal Donohoe. Photo: Reuters

Ireland on Tuesday cut its growth forecasts for both 2019 and 2020, in moves that “reflect a deterioration in key export markets,” the country’s finance ministry said.

Ireland’s economy is forecast to expand by 3.9% this year and 3.3% next year, down from October projections of 4.2% and 3.6%, respectively.

The ministry said that the “external environment has become more challenging” since its previous forecasts.

“From an Irish perspective, the pace of growth has slowed in key export markets, with a loss of momentum particularly evident in both the euro area and the UK.”

“At the same time,” it said, “some domestic indicators have moderated in recent months.”

Even though growth projections have been revised downwards, the ministry said it was more optimistic about the country’s budgetary position. It now predicts that the Irish state will run a surplus of around 0.2% in 2019, thanks to the “very strong performance of corporation tax” revenues.

“Despite the less favourable external environment, the Irish economy remains in a strong position and this is paying dividends in the labour market where an additional 50,000 jobs are expected to be added this year,” finance minister Paschal Donohoe said in a statement.

We cannot be complacent, however, as there are serious risks on the horizon, not least of which is the nature and timing of the UK’s exit from the European Union. It is absolutely vital that we continue to build up our fiscal defenses, so that we can continue to support the economy, and provide for society, if, and when, these risks materialise.”